To better match cost to revenues Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here. Maintenance Utilities Overhead costs incurred $18,700 $9,000 Service provided to: Maintenance Dept. 10% Utilities Dept. 20% Producing Dept. A 40% 30% Producing Dept. B 40% 60% Using the step method, how much of Lewisville's Corporation’s Utilities Department cost is allocated between Departments A and B? (order of allocation begins with Maintenance) Group of answer choices $9,900 $10,800 $12,740 $27,700
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
To better match cost to revenues Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here.
|
Maintenance
|
Utilities
|
|
| Overhead costs incurred |
$18,700
|
$9,000
|
| Service provided to: | ||
| Maintenance Dept. |
10%
|
|
| Utilities Dept. |
20%
|
|
| Producing Dept. A |
40%
|
30%
|
| Producing Dept. B |
40%
|
60%
|
Using the step method, how much of Lewisville's Corporation’s Utilities Department cost is allocated between Departments A and B? (order of allocation begins with Maintenance)
In order to better match cost with revenues, Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here.
|
Maintenance
|
Utilities
|
|
| Overhead costs incurred |
$18,700
|
$9,000
|
| Service provided to: | ||
| Maintenance Dept. |
10%
|
|
| Utilities Dept. |
20%
|
|
| Producing Dept. A |
40%
|
30%
|
| Producing Dept. B |
40%
|
60%
|
Assume that Lewisville Corporation distributes service department overhead costs based on the algebraic method. What would be the formula to determine the total maintenance costs?
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